Schatz urges PUC to focus on NextEra’s plan for increasing renewable energy

U.S. Sen. Brian Schatz said he wants the state Public Utilities Commission to focus on NextEra Energy Inc.’s renewable energy and cost-cutting capabilities when deciding whether the Florida-company is fit to purchase Hawaiian Electric Industries Inc.

Schatz, in an interview with the Honolulu Star-Advertiser on Monday, said the PUC commissioners should not get distracted by other issues.

“I really think the PUC has to be laser-focused on reducing costs and increasing the penetration of renewable energy,” Schatz said. “Everything else is a distraction, and that is how the PUC ought to evaluate this.”

NextEra said in December it wants to buy HEI for $4.3 billion. Last month NextEra added more than 50 new commitments to its original proposal, including supporting the state’s goal to reach 100 percent electrical generation coming from renewables by 2045, committing to more than $465 million in customer savings and $500 million in economic benefits for the state over a five-year period, and accelerating the development of smart grids throughout the isles. The savings for residential users is estimated to be $372 per Oahu customer over five years. The sale must be approved by the PUC, which has said it will make a decision by June 2016.

Gov. David Ige said in July he is opposed to the sale of HEI to NextEra “in its current form.” Schatz declined to say whether he supports or opposes the sale.

“I think that is the balancing act here,” Schatz said. “I think a lot of people are attracted to the idea that somebody with real experience running a giant utility and with a big balance sheet may provide some opportunities, but the anxiety that we all have is that it is not all clear yet whether these folks get us. … Do they get what we’re are trying to do on the cost side? Do they get what we are trying to do on the renewable energy goal side?”

Schatz said he is surprised at the level of public interest in the proposed sale of Hawaiian Electric Industries Inc.

“I don’t think anybody could have imaged that you would have a PUC hearing at the Blaisdell, but that just shows how much passion there is on this issue,” he said.

The PUC will host “intervenor” hearings at the Hawaii Suite in the Neal S. Blaisdell Center from Nov. 30 through Dec. 3, Dec. 7 through Dec. 11, and Dec. 14 through Dec. 16. The Hawaii Suite can hold up to 1,000 people. The public is allowed to attend but not speak at those hearings. The hearings are for the 28 official “intervenors,” or groups participating in the PUC review process, to voice their opinions.

The PUC is holding a series of public hearings on all main Hawaiian islands. The Oahu hearing is set for Oct. 27 at 6 p.m. at McKinley High School.

Schatz has been the beneficiary of NextEra, HEI and Hawaii Gas political contributions.

In the 2014 election cycle, NextEra Energy contributed $10,000 to Schatz’s campaign, according to the Center for Responsive Politics. From 2013 through July 2015, Schatz received at least $26,350 from Hawaii Gas’ political action committees or individuals connected with the utility. During that same period, Schatz was given at least $25,950 from HEI’s PACs or individuals connected with HEI.

An additional concern Schatz voiced about the HEI sale was that it may divert attention away from other important issues awaiting decisions from the PUC.

“There is also the question of how our utility is dealing with our current problems and we can’t simply wait 10 months before we get started on any of that,” Schatz said. “Whether we end up with NextEra-HECO or just HECO at some point in the middle of next year, we can’t afford to lose momentum or time in terms of our current challenges.”

The non-NextEra decisions facing the PUC include HECO’s proposal to increase solar power generation, cut customer bills by 20 percent as well as increase its use of renewable energy to 65 percent of its generation mix by 2030. Another decision before the PUC would change the amount solar customers are credited for the excess energy their solar systems send to the grid. Schatz added HECO’s grid improvements and the PUC’s decision on fuel choices to the list of initiatives he doesn’t want to be shelved as the sale of HEI is reviewed.

“We are not going to make progress if all we do is deal with the question of the configuration of our utility,” Schatz said.

On the issue of the state increasing its use of liquefied natural gas as an alternative to burning oil and coal for electric power generation, Schatz said he holds a slightly different position from Ige.

Ige said in August he is opposed to using liquefied natural gas for electric power because it would require a costly conversion of power plants and that money would be better spent on getting Hawaii closer to its goal of 100 percent renewable electric generation by 2045.

“I think the governor has valid concerns,” said Schatz, who was an early supporter of liquefied natural gas for Hawaii. “Obviously, if it is an enormous capital expenditure for relatively small savings that ought to cause us to reconsider. Where we differ is I think we ought to see what the electric utility and the gas utility propose to us and see how those numbers work out. The PUC, in the next six or so weeks, will be able to look at those questions and address them.”

Ige said, when he announced his opposition to liquefied natural gas, that he would be willing to sit down with HECO and Hawaii Gas to see their calculations on LNG.

Schatz said that Hawaii needs help from the federal government, as the state becomes a global leader in renewable energy adoption.

“People are impressed that we have been able to get high penetration of renewable energy into our grid and we have been able to do it over a relatively short period over time,” Schatz said. “We don’t just need good public policy and good leadership, although we need both of those things; we also need the technical expertise that could come from the U.S. Department of Energy. I’m in constant conversations with the secretary and others to make sure they know what is happening in Hawaii… What we can control is the way we generate electrons. That is a matter of state public policy supported by federal leaders and federal resources.”